Durga Pulses Vs ITO (ITAT Raipur)
Cash Deposited Before Loan in Creditor’s Account? Still No 68 Addition in Borrower’s Hands- If Creditor’s Source Is Doubtful, Addition Lies u/s 69A in Creditor’s Case—Not 68 in Borrower’s Case
Tribunal examined addition of ₹10,00,000 made by AO u/s 68 on the ground that creditor Smt. Kamlabai Bhushnia had deposited equivalent cash in her bank account just before giving loan to Assessee. AO held creditworthiness & genuineness unproved as creditor failed to furnish balance sheet, capital account & explanation for the cash deposit. CIT(A)/NFAC confirmed addition citing suspicious cash deposit.
Tribunal held that even if cash was deposited immediately before loan, the proper addition—if at all—was u/s 69A in hands of the creditor, not u/s 68 in hands of the borrower. Tribunal found that AO brought no evidence to show Assessee failed to satisfy the three limbs of s.68—identity, creditworthiness & genuineness—and also failed to verify whether any addition was made in creditor’s own assessment. Tribunal held the 68 addition arbitrary & unsupported, and also noted absence of enquiry by CIT(A) as required u/s 250(4) & (6). Entire addition was deleted. Appeal allowed.
FULL TEXT OF THE ORDER OF ITAT RAIPUR
The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, dated 26.08.2025 for the assessment year 2016-17 as per the following grounds of appeal:
“1. That, on the facts and in law, the order passed u/s 143(3) dt. 26/12/2018 is illegal and bad in law, as such, the impugned order dt. 26/12/2018 is liable to be quashed.
2. That, on the facts and law, Ld. CIT (A) erred in not appreciating the facts and confirming the addition of Rs.10,00,000.00 made by Ld. AO, and therefore the impugned addition is liable to be deleted.
3. That, the appellant reserves the right to add, alter or delete any ground.”
2. At the time of hearing, none appeared for the assessee. However, an adjournment petition has been filed which is rejected. The matter was heard after recording the submissions of the Ld. Sr. DR and on a careful perusal of the material available on record.
